This bill aims to clarify the business and occupation tax treatment of investment income derived from passive investment vehicles managed by individuals subject to the business and occupation tax under RCW 82.04.290(1). The legislation responds to uncertainties arising from a recent state supreme court decision, Antio, LLC v. Department of Revenue, which could lead to a restrictive interpretation of the deductibility of investment income. By amending RCW 82.04.4281, the bill seeks to ensure fairness for similarly situated taxpayers and maintain stability for both taxpayers and the state.

Key amendments include the addition of a new deduction for amounts derived from investments made under an investment management or advisory agreement with a person subject to tax under RCW 82.04.290(1). The bill also clarifies that nothing in this section affects the business and occupation tax obligations of those individuals. Furthermore, it provides a detailed definition of "investment" and specifies that the act applies retroactively, although it does not create a right to refund for taxes paid on investment income prior to the effective date of the legislation.

Statutes affected:
Original Bill: 82.04.4281